The FINANCIAL — The World Bank Group launched its new support program for Peru, which is aligned with the government modernization plan for 2021, the year the country will celebrate the bicentennial of its independence.
The World Bank Board of Directors endorsed the 2017-2021 Country Partnership Framework (CPF) on May 2.
The framework, with an approximate value of US$500 million for the first two years, will support three strategic pillars: productivity for growth; public services to the population throughout the country; and management of the environment and risks associated with climate change, according to the World Bank.
“With this new CPF, the World Bank reiterates its commitment to the Peruvian people and supports the efforts of the administration of President Kuczynski to improve the efficiency and effectiveness of the state and to bring it closer to citizens. All World Bank Group initiatives seek to improve the quality of life of all Peruvians, especially the 40 percent of the population with lower income,” said Alberto Rodríguez, World Bank Director for Bolivia, Chile, Ecuador, Peru and Venezuela.
Peru has made important economic and social strides over the past two decades: sustained economic growth and a decrease in the poverty rate, from 58 to 22 percent of the population between 2004 and 2015. Additionally, its responsible macroeconomic management and experience in reducing malnutrition are widely recognized.
The country still faces daunting development challenges, however. The lack of connectivity between production centers and borders or ports; the lack of innovation; the need to increase and maintain private investment; and the poor quality of public services throughout the country, including water and sanitation, health and access to justice for all, are some of these challenges. Given the less favorable global economic context, increasing government efficiency will play an even more crucial role in maintaining achievements and continuing to strengthen shared prosperity for all Peruvians.
The CPF includes financial instruments, technical assistance and exchange of global experiences to contribute to key government objectives. To achieve them, the World Bank Group will focus on:
Promoting productivity for growth by improving connectivity, with a focus on the most critical areas of the country.
Improving, among other services, access to and quality of water and sanitation, which is a government’s central objective.
Building capacity for management of natural resources and disaster risks associated with climate change, with an emphasis on reconstruction following the severe damage caused by the “Coastal Niño” weather phenomenon this year.
The CPF preparatory process included several consultations with the public and private sector, as well as with civil society organizations.
The current portfolio of the International Bank for Reconstruction and Development includes 15 investment projects and a subsidy of the Global Environment Facility, for a total of US$900 million. Additionally, Peru has access to four contingency credit lines for US$3 billion, including two for DPF-DDO (Development Policy Financing with a Deferred Drawdown Option) and two for CAT-DDO (Catastrophe Deferred Drawdown Option). The International Finance Corporation works with 20 institutions in the country and has an active portfolio of US$718 million. The active portfolio of the Multilateral Investment Guarantee Agency includes a contract with a gross exposure of US$6.2 million to support the concession of Lima’s international airport.